Triple Exponential Average (TRIX)

The Triple Exponential Average (TRIX) is an indicator used to identify divergences and overbought and oversold conditions, as well as give buy and sell signals. The TRIX is helpful because it tends to filter out short-term noise.

A 9-day TRIX is shown below in the chart of the E-mini S&P 500 Futures contract:

Buy when the TRIX crosses above the zero line.

Sell Signal

Sell when the TRIX crosses below the zero line.

The buy and sell signals are for entries. Using the above buy and sell signals for exits could prove profitless. A trader could consider exiting a long entry when the TRIX enters the oversold area and begins to turn downwards toward the zero line. Likewise, a trader could exit a short when the TRIX enters the oversold area and begins to turn upward and move toward the zero line.

Shown on the next page, another valuable use of the Triple Exponential Average is to confirm price action or not confirm price action through divergences.